Putin to stop sales of Russian oil to countries that cap price

The long-awaited response from the Kremlin states that the ban will begin on February 1, 2023, and will last for five months, until July 1.

The Group of Seven (G7) nations, alongside Australia and the European Union, agreed last month to a price cap of $60 per barrel of Russian seaborne crude oil as a means of reducing Russia's income from oil sales, a response to the nation's ongoing and widely-opposed war with Ukraine.

Since the price cap came into effect on December 5, governments have been waiting for a response from the Kremlin.

"This Executive Order was signed in response to the unfriendly actions taken by the United States, other foreign states and international organisations that sided with them," the notice from the government website reads.

Directly referencing the "price limit mechanism" established by foreign states, the Kremlin says that "Russia bans the sale of oil and oil products to foreign companies and individuals if the contracts on these sales include the use of this mechanism directly or indirectly."

"The established ban applies to all stages of sales up to and including the final buyer."

"The ban on sales of Russian oil products, as established by the current Executive Order, is to be applied on the date determined by the Government of the Russian Federation but no earlier than the date of its entry into force," the notice states.

Putin has left the option open for the ban to be overruled, adding that "Russian oil and oil product sales, that are banned by the Executive Order, may be carried out under a special decision of the President of the Russian Federation."

The unprecedented move by the West to put a cap on oil prices is aimed at disrupting the Russian economy and impeding Putin's "special military operation" in Ukraine.

While it remains unclear how much of an immediate effect this will have on the nation's economy, Russian Finance Minister Anton Siluanov admited on Tuesday that the price cap is squeezing the country's export income, which could potentially deepen Moscow's deficit beyond the forecast two percent of GDP next year.